Asia Pacific leaders seek to sustain recovery

Abdul Khalik ,  THE JAKARTA POST ,  SINGAPORE   |  Sun, 11/15/2009 2:25 PM  |  Headlines

The leaders of the 21 member states of Asia-Pacific Economic Cooperation (APEC) started their meeting in Singapore this weekend, with talks on sustaining a global economic recovery.

The leaders, who took part in a retreat on Saturday with plans to issue a joint statement Sunday, are expected to agree on the need for balanced, inclusive and sustainable growth in the region while resisting protectionism and accelerating integration of its economies.

In their draft statement, a copy of which was obtained by The Jakarta Post, the leaders of APEC, which includes fast-growing economies such as China and Indonesia and large economies such as the US and Japan, agreed to reduce saving-investment imbalances over time.

"In APEC, we will focus on structural policies to strengthen long-term potential output growth and narrow the development gap between economies by improving economic flexibility, fostering private demand and developing financial markets," it said.

Trade tensions have intensified since the financial crisis first hit, with the US repeatedly accusing a number of countries, especially China, of deliberately raising barriers to its products, causing huge deficits for the US and huge surpluses for China.

The US has pleaded with APEC countries to open up their markets to its products. US Treasury Secretary Timothy F. Geithner has asked Indonesian Finance Minister Sri Mulyani Indrawati to make more room for US products.

Realizing the possibility of more protectionism and a trade war, the APEC leaders vowed to "firmly reject all forms of protectionism and reaffirm our commitment to refrain from raising new barriers to investment or to trade in goods and services".

President Susilo Bambang Yu-dhoyono told business leaders on Friday it was important to keep flows of trade and investment open in Asia, as well as those between Asia and the rest of the world, while maintaining the APEC's vision of an "open" region.

But the President warned that a more open market must include capacity building for weaker parties.

"With rising unemployment faced by many APEC members, we need to bolster confidence to continue opening up our economies and deal with those left behind and marginalized by globalization," he said.

On Saturday the leaders also discussed the APEC vision of a Free Trade Area of the Asia-Pacific (FTAAP).

Several leaders highlighted the Trans-Pacific Strategic Economic Partnership Agreement (TPP) as one possible pathway to achieving this aim. They welcomed US President Barack Obama's announcement Saturday that the US would join and work towards an agreement.

Singaporean Prime Minister Lee noted that steps like the TPP were important, but added political conditions needed to be right before negotiations for a Free Trade Area of the Asia Pacific could start.

Trade Minister Mari Pangestu rejected the FTAAP, saying the ASEAN should stick to long-standing building blocks such as the ASEAN+3 (ASEAN member states plus China, South Korea and Japan) or ASEAN+6 (ASEAN plus China, South Korea, Japan, Australia, New Zealand and India) to build a greater free-trade area in the Asia Pacific.

Also on Saturday the ASEAN announced it would achieve its zero-tariff target for all merchandise moving across its member states' borders by Jan. 1 next year.

"This definitely is an occasion for ASEAN to celebrate," ASEAN Secretary-General Surin Pitsuwan said in a statement.

This demonstrated that ASEAN was on track toward tariff liberalization, despite the global struggle against a rising tide of protectionism, he said.

Six older ASEAN member states - Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and Thailand - have been following liberalization efforts since the introduction of the ASEAN Free Trade Area in 1992.

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